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Posted on 06 August, 2019, No Comments Comments admin
The current session of Parliament has been the most productive where historical legislations have been passed. The Triple Talaq law, strengthening of India’s anti-terror laws and the decision on Article 370 are all unprecedented. The popular belief that the promise BJP made on Article 370 is an unachievable slogan has been proved wrong. So strong is the public mood in support of the new Kashmir policy of the Government that several opposition parties had succumbed to the public opinion. For the Rajya Sabha to approve this decision by a two-third majority goes beyond anyone’s imagination. I analyse the impact of this decision, history of failed attempts on resolving the J&K issue.
History of the failed attempts
The Instrument of Accession was signed in October, 1947. Refugees from West Pakistan had migrated to India in millions. Pandit Nehru’s Government did not allow them to settle in Jammu and Kashmir. Kashmir, for the last 72 years, has been the unfinished agenda of Pakistan. Panditji wrongly assessed the situation. He volunteered a plebiscite and allowed UN to discuss the issue. He took a decision trusting Sheikh Mohd. Abdullah to head the State. He then lost trust in Sheikh Sahab in 1953 and jailed him. The Sheikh had converted the State into a personal kingdom. At that time there was no Congress Party in the State of Jammu and Kashmir. The Congressmen were National Conference members. A Congress Government in the name of National Conference was installed. It was headed by Bakshi Ghulam Mohd. The National Conference leadership formed a separate group called the Plebiscite Front. But how would the Congress disguised as National Conference, win elections? The 1957, 1962 and 1967 elections were unquestionably rigged. One officer, Abdul Khaliq, the Collector of both Srinagar and Doda, was the Returning Officer and he prevented the nomination of any opponent in the valley. In these three elections, most Congressmen were elected unanimously. The people of the Kashmir valley lost faith in the Central Government.
This experiment of special status and handover of the State to Sheikh Sahab and then put Congress Governments in power was a historic blunder. The history of the past seven decades shows that the journey of this separate Status has been towards separatism and not integration. It created a separatist psyche. Pakistan was more than enthusiastic in trying to exploit the situation.
Mrs. Indira Gandhi then experimented releasing Sheikh Sahab and his forming a Government once again with Congress supporting the Government from outside. This was in 1975. Within months of taking over, Sheikh Sahab’s tone had changed and Mrs. Gandhi was clear that she had been let down.
After Sheikh Sahab’s demise, the leadership should have gone in the hands of senior National Conference leaders such as Mirza Afzal Beg but Sheikh Sahab wanted to convert Kashmir into his family fiefdom. Farooq Abdullah became the Chief Minister as Sheikh Sahab’s successor. Instead of strengthening the mainstream party, in early 1984, the Congress destabilised the Government. Overnight Chief Minister was changed through manipulation and jointly with a rebel group of the National Conference led by Sheikh Sahab’s son-in-law Gul Mohd. Shah was made the Chief Minister. The new Chief Minister obviously could not control the situation. His subsequent statements clearly establish his sympathies with the separatists. In 1987, Shri Rajiv Gandhi again reversed the policies and jointly contested the election with Farooq Abdullah’s National Conference. This election was also rigged. Some candidates, whose defeat was manipulated, subsequently turned separatists and even terrorists.
By 1989-90, the situation had gone out of control and the sentiment of separatism alongwith terrorism picked up. Kashmiri pundits, who are essential part of Kashmiriat, suffered the kind of atrocities which only the Nazis had inflicted in the past. The ethnic cleansing took place and the Kashmiri pundits had to move out of the valley.
With separatism and terrorism picking up, Central Governments headed by various political parties made three new kinds of efforts. They tried a dialogue with the separatists which turned into a futile exercise. The dialogue with Pakistan was attempted by Governments to resolve the Kashmir problem as a bilateral issue. Governments were talking to the creator of the problem in order to find a solution to the problem. After the dialogue experiment failed, many Governments at the Centre in larger national interest, decided to align with the so called mainstream parties of Jammu and Kashmir. The two national parties at some stage undertook the experiment of trusting the two regional parties – the PDP and the National Conference, installing them in power so that they can, with the help of the regional parties, communicate with the people. On each occasion, this experiment did not work. The regional parties spoke one language in New Delhi and another in Srinagar. The worst attempt to appease separatists thought was the 1954 decision on surreptitiously slipping Article 35A into the Constitution. It discriminated between two categories of Indian citizens and resulted in distancing Kashmir from the rest of the country. Meanwhile the Jamait started a huge campaign to convert the liberal valley from Sufism to Wahhabism.
The historic blunders of special status under Article 370 and Article 35A had cost the country both politically and financially. Today, when history is being re-written, it has given a verdict that Dr. Syama Prasad Mookerjee’s vision on Kashmir was the correct one and Panditji’s dream solution has proved to be a failure.
Prime Minister Modi’s Kashmir policy
In the last seven decades, different attempts to resolve the issue proved a disaster, Prime Minister Modi decided to follow an alternative approach. A few hundred separatist leaders and armed terrorists were holding State and country to ransom. The nation lost thousands of citizens and security personnel. Instead of spending on development, we were spending on security. The present decision makes it clear that just as the rule of law prevails in other parts of the country, it will equally prevail in the Kashmir valley. Security steps have been strengthened. Armed terrorists have been liquidated in large numbers. Their number has been reduced substantially. Security provided to separatists was withdrawn, the Income-tax Department and the NIA discovered the unlawful resources that these separatists and terrorists were getting. Between these two categories, only a few hundred people in the last ten months have suffered. But the remaining population of the Kashmir valley, after decades, has seen an era of peace. They were now the victims of terrorism since none other than Kashmiri Muslim lived in the valley. Many of them, out of fear, also shifted to the other states.
Enforcing law and order strictly and not sparing anyone who breached the law and make life safe for lakhs of Kashmiris and put pressure through all measures on the handful of separatists and terrorists. The last ten months have not seen any protest. Not even in Srinagar. The next logical step obviously is to re-examine the laws which created a separatist psyche. Total integration of the State with the country had to be done.
The argument given by the PDP and the National Conference leadership that if Article 370 or Article 35A are diluted, this will lead to Kashmir breaking away from India because it is the only conditional link between the country and Kashmir. The argument is clearly flawed. The Instrument of Accession was signed in October, 1947. There were no Article 370 or Article 35A even mentioned once by anyone. Article 370 came into the Constitution in 1950. In the Constitution Assembly, the debate lasted less than ten minutes. Leaders of the Government abstained from the debate and N. Gopalaswamy Ayyangar tabled the provision with a solemn promise that this is a temporary arrangement. Only one other member spoke on the subject. This minority community member did not oppose Article 370. He demanded that it also be made applicable to the region from which he came. Today there is only one nation where every citizen is equal. Initially, Panditji did not allow even the Supreme Court and Election Commission’s jurisdiction to extend to Jammu and Kashmir. Little did he realise that he was creating a sub nation. It is only after Sheikh Sahab was removed and imprisoned that these got jurisdiction over the State of Jammu and Kashmir. The decision to reverse the situation needed clarity, vision and determination. It also needed political courage. The Prime Minister has created history through his absolute clarity and determination.
The negative impact of Article 370 and Article 35A on citizens of Kashmir
Any citizen of India could go and settle in Kashmir, make investments and create jobs for development. Today, there are no industries, hardly any private sector hospital, no credible educational institution set up by the private sector. India’s most beautiful State has not had investments from even the hotel chains. Consequently, there are no new jobs for the local people, no revenue for the State. This gave rise to frustration in all regions of the State. These constitutional provisions are not cast in stone. They had to be removed/ diluted through the due process of law. Article 35A was not even approved by the Parliament or State Assembly. It defied Article 368 which lays down the procedure for amending the Constitution. It was brought in through back door by an executive notification. It permits discrimination and makes it non-justiciable.
The role of the two regional parties
The leaders of the two regional parties speak in two voices. Their statements in New Delhi at times are re-assuring. But in Srinagar they speak a different language. Their stand is influenced by the separatist environment. It is a hard reality that both of them have lost support on the ground. Several national parties have allowed themselves to be misguided. An issue of national integration has been translated into an issue of secularism. The two have nothing in common.
The level of popular support to this move have compelled several opposition parties to support the move. They have sensed the ground reality and do not want to face the wrath of the people. Regrettably, the Congress Party legacy, which first created the problem and then added to it, fails to see reason. Just as Rahul Gandhi’s support to the ‘tukde-tudke’ gang at the JNU was at variance with the sentiment of even the Congress workers, the same applies to this stand of the Government. Overwhelming majority of Congressmen support this Bill. Their private and public comments are in this direction but the National Party, as a ‘headless chicken’, is further consolidating its alienation from the people of India. The New India has changed. Only the Congress does not realise this. The Congress leadership is determined to succeed in its race to the bottom.
Posted on 31 July, 2019, No Comments Comments admin
Both Houses of Parliament have approved the “Triple Talaq” Bill. The new law seeks to criminalise those who in defiance of law still resort to this practice and drive their wife to destitution.
I had an opportunity to listen to the debate in Both the Houses. Strong arguments were presented on both sides. There are some basic principles to be kept in mind while analysing this issue.
No social security for women in India
Those who champion the case of liberalising the marriage and divorce laws must realise two basic facts. India is a developing society. Even though weaker sections are being provided certain facilities by the Government, the concept of social security does not exist in India. The second important fact is that in a divorce proceeding, no person can take advantage of his own wrong.
Christianity traditionally did not accept the idea of an easy divorce. The conservatives were opposed to the idea of divorce. However, with the economic evolution of developed countries along with the creation of a social security net, the laws in the developed world started liberalising. In most cases, negotiated settlements take place between the wife and the husband. The husband has to pay a huge amount of alimony or maintenance. In many societies, divorce is accompanied with sharing of assets. We, in India, are still in a stage where sharing of assets is extremely rare, maintenance levels are extremely low and post a divorce, unless she is working or employed, the wife is driven to either dependency or destitution. On basic principles of humanity, justice and fairplay, would it be right, irrespective of religion, to give to the husband a unilateral right to end the marriage? The fear of the husband uttering three words will always keep the wife subjugated and bear the injustice.
Divorce, in India, take place either by consent of both parties on agreed terms or one of the parties approaches the court for divorce on the ground that spouse has committed a “matrimonial misconduct” (the grounds for divorce in Indian law). Most cases end in a settlement with either a reconciliation or a divorce where a wife is provided for either monthly maintenance or a large lump-sum of money which will maintain her. The basic principle of matrimonial law is that no person can take advantage of his own wrong. The Shariat law was an exception. The husband may have wronged the wife and still despite his own matrimonial misconduct divorce her by uttering three words to dissolve the marriage. This is against all cannons of humanity, justice and fairplay. If this practice is adopted by others, many women would be driven to destitution.
The Politics of this Bill
This Bill has exposed all those who consider themselves ‘liberals’. A ‘liberal’ should ordinarily be hostile to the idea of discrimination and injustice perpetuated by an oral divorce. In this case, not one spoke in favour of the Bill which is ending the injustice. They raised weak arguments so that the fundamentalists amongst the Muslims are kept happy. Let us assume the reverse of the present situation. What if such a provision existed in Hindu law? Liberals, leftists, women organisations and perhaps even the judiciary would have been shocked with such a provision and would have attempted either for a repeal of the law or it being declared unconstitutional. These people stand exposed because what they have attempted to raise farcical objections. They wanted to continue and defend an obsolete practice which promotes injustice.
Rights vs. Rituals
The Fundamental Rights in India’s Constitution and the Right to Practice and Propagate ones Religion is in the same chapter of the Constitution. How do you reconcile provisions of personal law which violates fundamental rights? What would be the harmonious construction so that these provisions can co-exist?
I have consistently held the opinion that there must be a recognised distinction between two aspects which stem out of religious interpretations. The first is the ‘rituals’ of a religion. Rituals cannot be decided by the law. They remain squarely within the right to practice ones religion. However, fundamental rights belongs to all. One section of the society cannot be denied these rights. What affects the right of a citizen – in this case the Muslim wife, cannot be determined by a religion. After the constitution came into force, rights emanating from birth, rights of a minor, rights in relation to marriage, divorce, succession, adoption, rituals etc., belong to every citizen. They should necessarily be compatible with fundamental rights. Granting an arbitrary right to a husband to orally and instantaneously divorce his wife and does not deal with any ritual which is in the domain of a religion. In a society governed by Constitution and the rule of law, prima facie, this practice of oral divorce violates both the right to equality and the right of a woman to live with dignity.
It is long overdue that the courts re-examine whether the rights being deprived to a citizen on the grounds of personal law violate the constitutional guarantees.
The deterrent effect
Those with short-sighted vision have repeatedly argued that since the Supreme Court has declared the practice as unlawful, then why punish a husband who is indulging in an unlawful act. The “Triple Talaq” right used by him is unlawful and does not exist, then why send him to jail? The Supreme Court, by striking down the practice of “Triple Talaq”, has merely made a declaration of the law. This declaration has to be followed by a legislation which punishes the offending spouse for indulging in this cruel act despite it being declared unlawful. Many conservatives would still practice this irrespective of what the court has said. There is data available post the judgement which establishes that this is actually happening on the ground. Besides being tried for the offence in a court, obviously the husband will have to pay maintenance to his wife. Both these will have a strong deterrent effect for those who want to use the weapon of “Triple Talaq”. They will think hundred times before using it due to the onerous consequences of their illegality. I have no doubt that once an example is made out of some people, the fear of its consequences will lead to minimising this practice. If this law was not enacted, the judgement of the Supreme Court will turn into a futile academic exercise where the practice is illegal, if you still indulge in it, no penal consequence visits you.
Why make a civil contract into a criminal offence?
Demanding dowry, indulging in bigamy or polygamy, indulging in cruel behaviour (including mental cruelty) are all criminal offences. A bounced cheque or a defamation may be a civil wrong but both have penal consequences in criminal law. Merely to oppose a progressive legislation, one does not have to invent a new jurisprudence.
The Congress Party has ruled this country for a long time. During this period it has amended several personal laws to make them acceptable to the changing social mind-set. But when it comes to the Shariat, it is scared. It’s stand in both the Shah Bano case and now in the legislation emanating from the Shayara Bano case, it has given a clear evidence of its intent. It does not mind Muslim women being driven to destitution. After all, the fundamentalist vote bank is at a higher priority than justice being conferred to the female gender.
Posted on 18 July, 2019, No Comments Comments admin
The judgement of International Court of Justice (ICJ) delivered on the 17th of July, 2019 has strongly supported and upheld India’s case on most issues. The Court held that the Vienna Convention binds both the countries which effectively provides for consular access. Consular access is an extension of the principles of natural justice and fair play. An accused held in custody or detention in a foreign country has to be immediately informed that he has a right to seek consular access. The country to which the accused belongs has to be immediately informed that their national is in custody and, upon request, consular access has to be mandatorily provided. Such access enables an accused in a foreign land to get legal representation so that the trial against the accused would appear to be a fair trial. The ICJ has rightly held that each one of these pre-requisites were violated by Pakistan and, therefore, a conviction based on violation of such basic human rights cannot be allowed to be executed.
A plain reading of the judgement showed that India had won on almost all counts. What surprised many was the official claim of Pakistan that the judgement is, in fact, a Pakistani victory. Supporters of this viewpoint gave two primary reasons for such a boisterous and bravado claim. Firstly, Jadhav had not been released by ICJ and secondly, that the military courts in Pakistan had been upheld and the case will go back to the military courts itself which are entirely state controlled. The relevant question, therefore, when the case has been referred back to Pakistan, what will be the forum and the process of the review and reconsideration that will be available to Jadhav.
On Military Courts
The ICJ, in paragraph 135 of the judgement, clearly states that though India has asked for a declaration that Pakistan military courts are violative of international law, the ICJ was of the opinion that Tribunal/ Court had been constituted with the limited jurisdiction for the interpretation and the enforcement of the Vienna Convention. It’s jurisdiction does not extend to claims based on other rules of international law. It is, thus, clear that there is no opinion of the ICJ because of the limited jurisdiction of this Tribunal to the validity of the military courts. That question, thus, would remain open before an appropriate forum for adjudication in future.
ICJ’s requirement of an effective review and reconsideration mechanism
The ICJ’s subsequent observation on the nature of review and reconsideration is an example of legal craftsmanship in judgement writing. Thus, while not going into the question of the validity of the military courts, the observations of the court in paragraphs 139 to 147 give a clear indication amounting to a mandatory direction as to what is the nature of remedy available to Jadhav. The court has made observations which speak for themselves. I reproduce some of them:
- “The Court considers that a special emphasis must be placed on the need for the review and reconsideration to be effective. The review and reconsideration of the conviction and sentence of Mr. Jadhav, in order to be effective, must ensure that full weight is given to the effect of the violation of the rights set forth in Article 36, paragraph 1, of the Convention and guarantee that the violation and the possible prejudice caused by the violation are fully examined. It presupposes the existence of a procedure which is suitable for this purpose.” (Para 139)
- “The Court notes that, according to Pakistan, the High Courts of Pakistan can exercise review jurisdiction. The Court observes, however, that Article 199, paragraph 3, of the Constitution of Pakistan has been interpreted by the Supreme Court of Pakistan as limiting the availability of such review for a person who is subject to any law relating to the Armed Forces of Pakistan, including the Pakistan Army Act of 1952. The Supreme Court has stated that the High Courts and the Supreme Court may exercise judicial review over a decision of the Field General Court Martial on “the grounds of coram non judice, without jurisdiction or suffering from mala fides, including malice in law only” (para 141)
After noting that the Pakistan constitution provides that any law which is inconsistent with the fundamental rights guaranteed under the Constitution is void but this provision does not apply to the Pakistan Army Act. The ICJ notes in para 142 that the Peshawar High Court has already held:
“it had the legal mandate positively to interfere with decisions of military courts “if the case of the prosecution was based, firstly, on no evidence, secondly, insufficient evidence, thirdly, absence of jurisdiction, finally malice of facts & law”
- “In light of these circumstances, the Court considers it imperative to re-emphasize that the review and reconsideration of the conviction and sentence of Mr. Jadhav must be effective.” (para 144)
In paragraph 145, the ICJ recorded the confession given by the Counsel for Pakistan where he contends:
“the process of judicial review is always available”. Counsel for Pakistan assured the Court that the High Courts of Pakistan exercise “effective review jurisdiction”, giving as an example the decision of the Peshawar High Court in 2018”.
The ICJ to this adds its own observation in the same paragraph stating:
“The Court considers that the violation of the rights set forth in Article 36, paragraph 1, of the Vienna Convention, and its implications for the principles of a fair trial, should be fully examined and properly addressed during the review and reconsideration process.”
This effectively means that for a review and reconsideration, the denial of consular access amounting to violation of principles of natural justice would be a relevant ground for challenging the conviction. The key observation is made in paragraph 146 where the ICJ observes:
“The obligation to provide effective review and reconsideration is “an obligation of result” which “must be performed unconditionally….. Consequently, Pakistan shall take all measures to provide for effective review and reconsideration, including, if necessary, by enacting appropriate legislation”
An onerous responsibility through mandatory directions has been cast by the ICJ on Pakistan to ensure that the review and reconsideration has to be extremely broad ensuring that it takes into consideration all relevant grounds stated above by the ICJ. Obviously, where consular access is not granted and confessions made in custody are considered the most important piece of evidence before a military court, judgement delivered by such court on the face of the facts and law does not meet the requirements laid down by the ICJ. The nature of the judicial authority which will go into the question of review and reconsideration cannot be the military court. That is perhaps why the ICJ suggests that the creation of a new forum, if necessary, by a legislation.
Pakistan lost conclusively before the ICJ. It’s farcical processes through which innocent are held guilty, stand exposed. The ICJ has given Pakistan an opportunity to comply with the rule of law and reform its processes. Will Pakistan use this opportunity or will they squander it? Pakistan is now under a global gaze as to what direction it follows. The ICJ judgement in this case is a comprehensive victory for India.
Posted on 06 July, 2019, No Comments Comments admin
The Budget for each year is essentially a statement of income and expenditure of the Government. However, with the expansion of the Indian economy, it has acquired the role of a policy document. The Budget presented by the Finance Minister, Smt. Nirmala Sitharaman, is a policy document for the medium term. It is a budget of a continuing government, which has to accelerate the direction of the past. It expands the roadmap on which the Prime Minister has built up India’s growth story from 2014-19. The striking part of this period was that for a five year average, India grew by 7.3%, it’s revenues grew exponentially and it brought macro stability back with both the Current Account Deficit and the Fiscal Deficit being on the glide path downwards. The present Budget maintains that path based on the premise that economies which are fiscally prudent, eventually get rewarded as against those who indulge in fiscal adventurism.
A fundamental question has always been asked as to what would one choose between good economics and clever politics. The choice is unfair because any Government needs both in order to survive and perform. The Prime Minister’s first tenure witnessed this blending of good economics and good politics. The change, which was facilitated by the Jan Dhan Accounts and the AADHAAR, laid the foundation for Direct Benefit Transfer to those who needed State support. Subsidies were no longer an unknown amount of money being distributed to an unidentifiable class of people. Subsidies in the form of transfer of facilities to the poor is an example of the blending of good economics and good politics. The villages get roads, the poor get houses, and every household got a toilet, a gas connection and an electricity connection. Fifty crore people got hospital treatment upto Rs.5 lakh per year. Their lives became liveable with at least these basics. To carry this path forward, completion of the rural housing being constructed and delivered to the poor, and the conclusion of the remaining part of the gas connection programme, the Budget takes upon itself the task of concentrating, in the next five years, on a ‘tap for every home’. For this, it is necessary to clean up our rivers and have an adequate water management.
The last five years had seen a lot of emphasis on infrastructure. The Finance Minister has rightly given top priority to infrastructure. This priority is self-evident in the fact that the rural roads programme connecting every village with a motorable road is nearing completion. The National Highways are moving at a pace faster than ever before. Adequate amount of allocations have been made in the Budget for this. The railways is one of the top priorities of the Government. Besides faster trains, modernised coaches, additional railway safety measures, very soon India will witness the modernisation of its railway stations similar to what today has happened to the airports. Increase in port capacity, further development of inland water transportation and expanding the aviation sector to the remotest corner of the country is the roadmap which the Finance Minister has presented. This will be the India of 2024.
Modernisation of our cities with all-weather roads, an effective metro system, better urban roads are being given an impetus. The Government is committed to providing housing to the weaker sections in both rural and urban areas. A major tax incentive has been given to those who borrow to buy affordable houses. This move will not merely help the system to utilise the unsold stock of affordable houses but will also be instrumental in injecting liquidity into the real estate market.
The direction of reforms in the banking and financial sector has been maintained. Consolidation of public sector banks is being undertaken so as to have fewer but mega and financially strong banks. A sizeable allocation has been made for recapitalisation of banks so that their capacity to lend for growth improves. The Budget contains concrete proposals about support to the NBFCs whose liquidity, for the last several months, was under strain and had reduced the purchasing power of consumer. The sectors most affected by this were real estate, automobiles and the MSMEs.
While the GST reforms are being carried out by the GST Council, a lot of simplification for direct tax assesses has been proposed. Besides affordable housing, electric vehicles and start-ups are the sectors on which the Budget places an adequate emphasis. In the last two years, when the global crude oil prices had hardened, duties had been cut by the Central Government on at least two occasions in a major way. It is the softening of the crude oil prices which has persuaded the Government to raise the excise duty on petrol and diesel marginally so that this money could be transferred to a special fund meant for infrastructure creation, particularly for the National Highways and the rural roads programme.
The Budget creates a political direction for an aspirational India. The economically weaker sections get the basic amenities of life. Besides the income-tax exemption limit having been increased to rupees five lakhs in the interim Budget a few months ago, several sectors of interest to the middle class and the neo-middle class have been incentivised. These, in particular, include affordable housing and electric vehicles. Massive infrastructure creation also has the ability to generate employment and attract investment. So does a boost to the construction and real estate sector. India will continue to be the fastest growing major economy in the world. In the last two to three quarters growth has seen a moderation. Unquestionably, the Budget as a policy document lays down the roadmap for India to get back on track.
Posted on 01 July, 2019, No Comments Comments admin
Today, the Goods and Services Tax regime enters its third year. The monumental restructuring of one of the world’s clumsiest indirect tax system was not an easy task. The challenges to implement the GST were compounded by some outlandish and exaggerated comments of the not so well-informed. It would, therefore, be only fair to look back the last two years and analyse the implementation and the impact/ consequences of the GST.
The pre-GST regime
In a federal structure, both Centre and States were entitled to impose indirect tax on goods. The States had multiple laws which entitled them to impose taxation at different points. There were twin challenges. Firstly, to get the States to agree because some of them felt they were losing their fiscal autonomy to tax and, secondly, to develop a consensus in the Parliament. The States were scared of the fear of the unknown. The critical point which enabled the Government to persuade the States was to cushion them with a 14% annual increase from the tax base of 2015-16 for a period of five years.
The GST merged all these seventeen different laws and created one single taxation. The pre-GST rate of taxation as a standard rate for VAT was 14.5%, excise at 12.5% and added with the CST and the cascading effect of tax on tax, the tax payable by the consumer was 31%. The entertainment tax was being levied by the States from 35% to 110%. The assessee had to file multiple returns, entertain multiple inspectors and additionally face the inefficiency – trucks being stranded at the State boundaries for days altogether.
The GST changed this scenario completely. Today, there is only one tax, online returns, no entry tax, no truck queues and no inter-state barriers.
Consumer and assessee friendly
After two years, one can confidently argue, without fear of contradiction that GST proved to be both consumer and assessee friendly. The high taxation of pre GST era pinched the consumers’ pocket and acted as a disincentive against tax compliance. The last two years have seen each of the meetings of the GST Council reducing the tax burden on consumers as the tax collections improved. An efficient tax system certainly leads to better compliance. The 31% tax, which was temporarily 28%, has seen the largest single reform. Most items of consumer use have been brought in the 18%, 12% and even 5% category. Only luxury and sin goods remain in addition to some white goods. A sudden reduction of all categories can lead to a massive loss of government revenue leaving the government without resources to spend. This exercise had to be done in a gradual manner as the revenues increased. The Cinema tickets, earlier taxed at 35% to 110%, have been brought down to 12% and 18%. Most items of daily use are in the zero or 5% slab. The loss to the revenue on account of this reduction collectively has been more than Rs.90,000 crore annually.
Widening tax base and higher revenue
The assessee base in the last two years has increased by 84%. The number of assessees covered by the GST were around 65 lakh. Today, they are at 1.20 crores. This obviously leads to higher revenue collections. In the eight months of 2017-18 (July to March), the average revenue collected per month was Rs.89,700 crore per month. In the next year (2018-19), the monthly average has increased by about 10% to Rs.97,100 crore. The fear of the States today is that for the first five years they get a guaranteed 14% increase. The lurking doubt is as to what will happen after five years? Every State has been paid its share of tax as also from the compensation fund, if necessary. We have just completed two years of GST. Already after the second year, twenty States are independently showing more than a 14% increase in their revenues and the compensation fund in their case is not necessary.
Simplification and compliance
Businesses upto an annual turnover of Rs.40 lakh are GST exempt. Those with a turnover upto Rs.1.5 crore can make use of the composition scheme and pay only one percent tax. There is now a single registration system which works online and the procedures for the trade and business are reviewed and simplified regularly.
A response to certain misconceived ideas
Many warned us that it may not be politically safe to introduce the GST. In several countries, governments lost elections because of the GST. India had one of the smoothest transformation. Within the first few weeks of the implementation, the new system settled down. There were a few protests in Surat. The issues were resolved. The BJP won all the Assembly seats in the Gujarat poll in Surat. In 2019, the BJP won the Surat seat by the highest margin in the country. Those who argued for a single slab GST must realise that a single slab is possible only in extremely affluent countries where there are no poor people. It would be inequitable to apply a single rate in countries where there are a large number of people below the poverty line. The direct tax is a progressive tax. The more you earn, the more you pay. An indirect tax is a regressive tax. In the pre-GST regime, the rich and the poor, on various commodities, paid the same tax. The multiple slab system not only checked inflation, it also ensured that the Aam Aadmi products are not exorbitantly taxed. Illustratively, a Hawai chappal and a Mercedes car cannot be taxed at the same rate. This is not to suggest that the rationalisation of slabs is not needed. That process is already on. Except on luxury and sin goods, the 28% slab has almost been phased out. Zero and 5% slabs will always remain. As revenue increases further, it will give an opportunity to policy makers to possibly merge the 12% and 18% slab into one rate, thus, effectively making the GST a two rate tax.
The Role of the GST Council
The GST Council is India’s first statutory federal institution. The Centre and the States jointly sit and decide. Both have pooled their fiscal rights in a collective forum to create one common market. My own experience of two years while chairing the GST Council, was that Finance Ministers’ of States, notwithstanding the political position their parties take, have displayed a high level of statesmanship and acted with maturity. The Council worked on the principle of consensus. This has added to the credibility of the decision making process. I am sure this trend will continue in future.
Posted on 20 May, 2019, No Comments Comments admin
Many of us may continue to squabble over correctness and accuracy of the Exit Polls. The hard reality is that when multiple Exit Polls convey the same message, the direction of the result broadly would be in consonance with the message. Exit Polls are based on personal interviews. The EVMs have no role. If the results of the Exit Polls and final results on the 23rd May, 2019 are in the same direction, the Opposition’s fake issue of the EVMs would also lose its non-existent rationale.
If the Exit Polls are read alongwith the 2014 election results, it would be clear that there is a huge maturing of Indian democracy taking place. The electorate keeps national interest paramount before exercising a choice on whom to vote for. When well-meaning people with similar ideas vote in the same direction, it leads to the making of a wave.
This maturing of democracy is visible from the following messages that the voter is sending:
- Dynastic parties, caste parties and the Obstructionists Left received a setback in 2014. This will be reiterated, loud and clear, in 2019.
- ‘Coalition of Rivals’ are untenable alliances and the voters are no longer willing to trust them. Political analysts are confused but the voters are clear. They don’t elect hung Parliament where ugly and untenable coalitions have a role to play.
- The arithmetic of caste coalitions loses to the chemistry on the ground created for the front runner in the elections. This chemistry is in form of catching the imagination of the people on issues of national interest.
- Fake issues only satisfy the ‘manufacturers of fakery’. The voters don’t buy them.
- The personalised campaign against Prime Minister Modi did not cut much ice in 2014 and may not cut any ice in 2019. Leaders are judged on merit and not on caste or family names. Thus, the Prime Minister’s style of rising above caste and concentrating on performance related issues received far more acceptability with the electorate.
- I re-assert my earlier hypothesis that in the Congress the first family is no longer an asset but an albatross around neck of the Party. Without the family, they don’t get the crowd, with it they don’t get the votes.
Many Politicians believe that the ultimate wisdom lies only with them. They are, thus, unwilling for any radical solutions. The evolving ‘New India’ will accept structured parties with talent and ideological clarity concentrating on performance. If, however, the political parties are unwilling to get the message of 2014 and the possibly of 2019, then alienation from the electorate will only widen.
Posted on 16 May, 2019, No Comments Comments admin
As the seventh phase of election approaches to closure, the groundswell in favour of Prime Minister Modi is becoming stronger. Except in the last few days, not one political analyst had foreseen the velocity of this groundswell even in a State like Bengal. The largest size of the Prime Minister’s public rallies have been in Bengal.
The positive reasons for the Prime Minister’s acceptability has been his decisiveness, integrity and performance, his delivery of resources to the poor, and his security doctrine which has been a game changer. The NDA’s strength has been a complete absence of any confusion about leadership or programme. There is an absolute consensus.
The not so positive reason for the Prime Minister’s high acceptability levels is the absence of any cogent or coherent alternative. Conventionally, it used to be referred to as the ‘TINA’ factor. This effectively means that ‘There is no alternative.’ If the Opposition is giving vague assurances of an alternative, the same is either too scary or absolutely frightening. The Opposition could not forge an alliance in several key States. They do not call a meeting of different Opposition parties for the obvious fear that many will not attend the meeting. The common thread which brings them together is negativism – to get rid of one person. They have no agreement on either a leader or programme. They are a completely fractured Opposition which could not come together before or during the election. Who will believe their assurance that they can come together after the election? They are institution wreckers. They do not allow Parliament to function. They attack and intimidate Judges. Now Election Commission is their next target. The attack on the EVMs and the Election Commission is an advance alibi for defeat on the 23rd May, 2019. Their leaders represent temperamental mavericks, some highly corrupt and many – a governance disaster. The electorate wonders, if they can ever provide a cogent alternative. Past history belies the longevity of such opportunistic and fragile combinations.
To the electorate, they provide an absolutely frightening scenario. I have long argued that aspirational societies look for a better tomorrow. They are averse to suicidal choices. The frightening and scary scenario that the Opposition promises will be responsible for its rout. This consolidates the groundswell in favour of Modi.
Posted on 10 May, 2019, No Comments Comments admin
Counting for the results is only thirteen days away. Traditional political rivals have started open or secret parleys. Their best hope is that the Indian voter is neither wise nor sensible and hence would give an indecisive verdict. This presumption will be strongly belied on 23.5.2019. Rahul Gandhi has reduced the Congress to a double digit party. Congressmen are hoping against hope if they can break the double digit barrier. Their level of ambition is hopelessly inadequate. Mayawati is fully determined to throw her hat in the ring. Mamata Banerjee and Chandrababu Naidu believe that they are the ‘Sutradhars’ of the Opposition. KCR dreams of a non-BJP, non-Congress coalition of parties.
None of these hopeful leaders have been able to understand the real trend on the ground. As the results get declared, two of the contenders – Mamata Didi and Chandrababu Naidu – would have realised that they have lost a large ground in their own States. Voters want responsible governance, not political acrobatics by the leaders they trust. Election is a time when the voters respond. The others to be shaken will be the Congress which would have failed to add any significant numbers to its 2014 tally. The anarchic Aam Aadmi Party could be reduced to virtually next to nothing in the election.
The significant features, which have been noticed as the sixth phase of electioneering concludes, are evident. Where it’s Congress versus BJP, the Congress is unable to give a fight. Some regional combinations are trying to make a semblance of a fight. But India has changed. The youth defy the traditional caste arithmetic. Dynasties are more ridiculed than cherished. The ‘New India’ judges the performance of its leaders very harshly. It has tried and finally trusted the leadership of Prime Minister Narendra Modi. The new generation of the Gandhis believes that national security is a non-issue. Quite to the contrary, when national security issues are raised in large public meetings, the applause for the leader is the maximum. Are the Opposition parties unable to figure out the ‘Modi Modi’ shouts confronting them when their leaders pass through crowded areas? Except for those who prefer to deceive themselves, media persons travelling across the country have a uniform report that there is an extremely strong pro-Modi trend visible amongst the voters. The Prime Ministerial contest is almost becoming a one horse race. Very rarely has India witnessed such a powerful ratings for an incumbent Prime Minister to be voted to power. The model experimented between 2014-2019 of a single party majority Government, with allies participating in a coalition Government, has provided India a stable and a decisive regime. ‘Coalition of rivals’ lasts only a few months. The electorate is clear that it wants a five year Government and not a five month one. It is thus confronted with the choice of a Modi vs. Chaos. Obviously, the electorates’ wisdom has to be trusted when he makes a choice. The ‘Modi mandate’ could be larger than 2014.
Posted on 07 May, 2019, No Comments Comments admin
The Model Code of Conduct (MCC) is an extremely important and powerful instrument available to the Election Commission for the conduct of free and fair elections.
There was a time when the MCC was only directive in nature. There used to be frequent litigations about its legal enforceability. The first NDA Government headed by Shri Atal Bihari Vajpayee and the then Election Commission, agreed in principle to give a statutory support to the MCC. The Chief Election Commissioner at that time, Dr. M.S. Gill, and the Law Ministry, which I was looking after, entered into consent terms about the MCC. In a pending dispute in the Supreme Court, these consent terms were filed. The MCC drew statutory support from Article 324 of the Constitution under the terms. The Supreme Court enforced, accepted and approved the consent terms. Since then the MCC acquired more teeth.
Article 324
Article 324 of the Constitution gives to the Election Commission the power to take all necessary steps in order to ensure the conduct of free and fair elections. There are several areas which are occupied by statutes for the conduct of elections. There are provisions in the Constitution, the Representation of People’s Act, 1951 and several other regulations and orders framed from time to time. The consistent interpretation of Article 324 by Supreme Court has been that Article 324 does not cover the space which is already occupied by legislation. Where there is an existing law, regulation or order, the same will prevail. However, Article 324 is the reservoir of all unoccupied space. Thus, any power exercised by the Election Commission under Article 324 cannot relate to areas which are covered by the legislation or regulation but will be confined to areas where legislation does not occupy any space. This principle will also apply with all force to the Model Code of Conduct which draws support from Article 324.
The Model Code of Conduct and the Right to Free Speech
There are several electoral offences which are specifically dealt with in law. Obviously, in all these areas, the law will prevail. The residuary areas will give full power to the MCC to operate. Of late, a tendency has developed amongst the political parties to excessively allege violation of the MCC by their opponents. The Congress Party as the ‘Cry Baby’ of this election, is leading the pack. Article 19(1)(a) confers to every citizen the Right to Free Speech. Article 19(1)(a) is an unamendable part of the Constitution. Neither Parliament nor the Supreme Court can in any way dilute the impact of Article 19(1)(a). The Right to Free Speech does not get suspended or diluted even during elections. Quite to the contrary, elections are the greatest celebration of Indian democracy. The sacrosanct Right of Free Speech has to be fully protected during this period. While submitting memorandums on violation of the MCC in relation to contents of a political speech, everyone has to bear in mind that the MCC has to be interpreted not as diluting free speech but is subject to the Right to Free Speech. The Right to Free Speech is only subject to the restrictions mentioned in Article 19(2). The Election Commission, therefore, is under an obligation not to dilute or compress Right to Free Speech. It is entitled to enforce all such provisions, where there is a violation of the provisions of election law and all such speeches which can be interpreted either as violation of law or constitute as permissible restrictions mentioned in Article 19(2) of the Constitution. The MCC and the Right to Free Speech have to co-exist. The MCC cannot encroach the Right to Free Speech. The two have to exist harmoniously.
Let us take some recent illustrative cases. In the first, the Prime Minister appealed to first time voters that they must always keep in mind the sacrifice of the martyrs when they vote in an election. No party or candidate was mentioned. The second illustration is a comment made in relation to the Congress President contesting the election from Wayanad. A reference here is made to the demographic composition of the new constituency. If such speeches are considered by anyone as violative of the MCC, that may actually run the danger of the MCC’s constitutionality in relation to free speech being called into question. To avoid such a situation, the memorialist must keep in mind that the Right to Free Speech has not been diluted by the MCC in any way. The third illustration relates to the Gandhi Family principle of restrictive free speech. They can call even an honest Prime Minister a ‘Chor.’ Others don’t possess that right.
Posted on 03 May, 2019, No Comments Comments admin
Dynasts have self-illusory opinion about themselves. They create a disproportionate image about their own abilities in their own mind and believe that the universe around them thinks alike. They tend to become megalomaniacs. Rahul Gandhi is no exception. He announced four months ago that Prime Minister, Narendra Modi, will lose in Varanasi and that the BJP will be reduced only to a couple of seats. He has a disproportionate impression about his oratorical skills when he challenges one of the greatest communicators of his times, Prime Minister Modi, for a public debate. He comes out with outrageous ideas about security, economy and social issues and believes that his views have found mass acceptability. With Prime Minister Modi’s personal acceptability ratings today being close to 70%, Rahul proclaims that he is dead sure that Modi is very unpopular. The irony of every dynast is that he buys his own propaganda even if there are not too many others willing to accept it.
Dynasts have a sense of entitlement. They believe that they were born to rule. Gandhis suffer from this sense of entitlement. The 2014 election was an utter shock to them. Losing to a person of modest origins and being reduced to the lowest ever strength in history, became unacceptable to the dynasty. It took them more than three years to get out of the shock of the 2014 rout. The strategy devised was that Modi had to be fought and removed. He was considered a strong and a popular leader. His delivery systems were extremely clear. He enforced honesty in public life. He was a strong performer on the security front. The ‘Kaamdaar’ was being admired for his work. Unacceptability of a commoner challenging the dynast and defeating him led to both envy and revenge. Rahul’s statement quoted in a media organisation yesterday that “I have dismantled Modi’s image” was a give-away. The only way a dynast with a little acceptability in the country can react to the commoner who defeated him is that ‘I will damage his image.” But how do you damage the image of a person who is riding perhaps at the peak of his popularity? How do you damage the reputation of a person who is known to be incredibly honest? Can image be destroyed by a person who belongs to a family which has been tainted through generations with charges of corruption? How do you claim to have succeeded in damaging the image of a powerful personality where Prime Minister Modi’s acceptability ratings are close to 70% and Rahul is finding it difficult to even breach the 20% mark?
Its clear that Rahul Gandhi concocts falsehood, as in the Rafale case, starts believing his falsehood to be true and eventually dreams that the falsehood has destroyed his opponent. He does not gauge public opinion. He only talks but does not listen. Such people surround themselves with advisors who have also tactically learnt to only give good news to the dynast. Rahul’s attitude is at complete variation with the traditional Congress way of doing things. His revenge against Prime Minister Modi may not succeed. It may well turn out to be a revenge against the Congress.